Write-Down Pushes Lee (St. Louis Post-Dispatch) to a Loss (Dinosaur Media DeathWatch™)

The Wall Street Journal ^ | March 28, 2008 | Kathy Shwiff

[abb]

Newspaper owner Lee Enterprises Inc. expects a net loss in its fiscal second quarter and fiscal year because of a write-down that could total $500 million to $700 million.

Lee, publisher of the St. Louis Post-Dispatch, Lincoln Journal Star and 49 other newspapers, expects to write down the value of goodwill and other intangible assets, including some newspaper mastheads, in the quarter ending March 30.

The company said it will include an estimated value of the write-down when it reports second-quarter results because the final amount will not be determined for several months.

Lee said the difference between its stock price and its book value is the main reason it is taking the write-down. Its shares closed Friday at $10.76, down 31 cents, or 2.8%. Shares rose 10 cents in after-hours activity.

Chief Executive Mary Junck said, "We believe the current stock price understates the value of our company, as well as the future of our industry. Although accounting rules require us to reflect these charges in our financial statements, we remain positive about the future of our business and prospects for continued growth when the current economic downturn subsides."

Lee said second-quarter earnings also would be cut by 17 cents a share as it records the current value of its future liability related to unwinding of the 5% minority share in its St. Louis partnership.

In June 2005, Lee bought Pulitzer Inc., which owned 95% of a joint venture that operates the Post-Dispatch. The company could be required to buy the other 5% in May 2010. The present value of that liability is about $68.3 million.

snip

[abb]

Saturday Morning good news.

[abb]

ping

[abb]

http://www.reuters.com/article/marketsNews/idUKN2842344920080328?rpc=44

SAN FRANCISCO, March 28 (Reuters) - St. Louis Post-Dispatch publisher Lee Enterprises Inc (LEE.N: Quote, Profile, Research) said on Friday it expects to write down about $500 million to $700 million after taxes for the quarter ending March 30, 2008.

Lee said the write-down, which it called an impairment charge, would result in a loss for the quarter and for the full year ending Sept. 28, 2008. It said the complex nature of the calculations involved means the final amount cannot be determined now, and would not be finalized for several months.

Second-quarter earnings also will include a charge of 17 cents a share as Lee records the current value of its future liability related to a 5 percent minority share in a partnership it is involved with in St. Louis.

The noncash charge is similar to one that other publishers, including McClatchy Co (MNI.N: Quote, Profile, Research), have taken as the value of their newspaper properties plummets amid an ongoing advertising slump.

Some of the write-down involves goodwill and intangible assets related to Lee’s 2005 purchase of Post-Dispatch publisher Pulitzer Inc, Chief Financial Officer Carl Schmidt said.

Lee’s shares are trading far off their 52-week high of $30.91 in April 2007 as it and other newspaper publishers’ shares have fallen, reflecting lower ad revenue in their print newspapers. Based on Lee’s closing share price on Friday, the company’s market value is about $502 million, about one-third the $1.46 billion that it paid for Pulitzer.

In an interview, Schmidt said Lee believes strongly in the future of its business.

“We’re certainly in a period now where I think general economic conditions are contributing to the pessimism,” he said. “We certainly believe and have said publicly from time to time that ... the market has over-reacted to what has happened in our industry, and that’s unfortunate.”

Lee shares fell 31 cents, or 2.8 percent, to $10.76 on the New York Stock Exchange. (Reporting by Robert Macmillan; editing by Gunna Dickson, Gary Hill) (robert.macmillan@reuters.com; +1 646 223 6012; Reuters Messaging: robert.macmillan.reuters.com@reuters.net)) Click here to see Reuters MediaFile blog

[not2worry]

The St. Louis Post Dispatch is a liberal rag at best.

I doubt that many people in the City of St. Louis subscribe any longer....they have all moved to the suburbs, which are largely conservative politcal bastions.

It is my understanding when the Pulitzer family sold to Lee that they had an understanding that the paper would always remain liberal and support the Democratic Party.

Well, I guess Emily Pulitzer is soaking up the sun and the money this winter in Florida while Lee Enterprises shovels it's financial hole a little bit deeper in St. Louis.

[abb]

They cashed out just in time, it seems.

http://www.stltoday.com/stltoday/news/stories.nsf/stlouiscitycounty/story/D64D23FA95A4915C86256F9A001B3D32?OpenDocument&Headline=Familys+newspaper+tradition+comes+to+an+end

Pulitzers sought a responsible steward for company
By Tim McLaughlin
OF THE POST-DISPATCH
Sunday, Jan. 30 2005

Pulitzer family members Sunday night described a gut-wrenching decision to sell
the Post-Dispatch and their other newspapers. But without a new Pulitzer
generation to embrace one of the most storied franchises in American
journalism, they looked to Davenport, Iowa, to preserve Pulitzer traditions of
watchdog journalism and feisty editorials.

Many Post-Dispatch readers and employees will pick up their beloved broadsheet
this morning and learn for the first time their newspaper is being sold to Lee
Enterprises Inc. as part of a $1.46 billion deal announced late Sunday night.
Lee will acquire Pulitzer Inc., whose properties include the Post-Dispatch and
the Suburban Journals of Greater St. Louis, for a cash purchase price of $64
per share.

The Pulitzer family is cashing out and will not sit on Lee’s board of
directors, Pulitzer Chairman Michael E. Pulitzer confirmed Sunday night in a
telephone interview from his home in Santa Barbara, Calif.

Emily Rauh Pulitzer, one of three Pulitzer relatives who controlled the
company’s destiny, said the group wanted to find a responsible steward for the
company, its employees and its readers. She became the company’s largest
shareholder after her husband, Joseph Pulitzer Jr., died in 1993.

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[andyandval]

Forgive my ignorance, abb. But to write down an asset (Goodwill) is to basically reduce the value of the company, which reduces the book value of a share of stock, which brings that value more in line with the price the stock is trading at???

Do I have that right?

[cdcdawg]

newspapers are some of the most poorly managed businesses around. They are losing money because they are libs, but it has little to do with their reporting. Libs don’t know how to make money. I am new to the industry, and am dumbfounded at what our new (competent) management is having to clean up. Meanwhile, the idiots who made the mess all moved on to carry on at other papers. Liberal reporting and editorial is annoying, and hurts the papers, but lack of business sense is what is mostly driving them into the abyss.

[abb]

Yes, that’s pretty much it. The asset loses value and the books are adjusted to reflect that.

[Judith Anne]

There used to be (waaaaay back) two papers, the Globe-Democrat, which came out every morning, and was the more conservative of the two papers, and the Post-Dispatch, which came out in the evening, and was liberal.

The Globe folded years ago.

I like newspapers, generically speaking, and used to enjoy reading them (waaaaay back) and would subscribe again to a physical newspaper, IF there was a conservative voice in my area. It was a very enjoyable breakfast ritual, to read the papers in the morning, sitting at the table with the second cup of coffee.

*sigh*

[Cicero]

I’m inclined to agree with you. Liberals have a tendency to think that, since they are always correct, reality has a duty to bend to their wishes.

In fact, that is the basic theory behind Postmodernism: that reality is a social or cultural construct, and that the duty of liberals is to seize the levers of power and use them to reconstruct reality in the right way. That idea was also immortalized in the Supreme Court’s Casey decision, which declared as self-evident that every citizen has a constitutional right to reconstruct reality in whatever fashion he chooses.

I imagine the remaining Pulitzers are crying all the way to the bank, since the company is now worth one sixth of what they sold it for. But I’m sure they still expect feisty editorials from their successors.

[Grampa Dave]

The days of Enronning by the dinosaur fishwraps are coming to a rapid close.

[chronicles]

This is good news, thanks for posting.

My 87 yr old mother has always read the Post and believes everything she reads in it.

The Post is disgustingly biased. I hope it folds.

[ken5050]

Don't forget the rule of thumb when it comes to write-downs...the auditors insist upon it, because of changing business and financials, the owners resist bitterly..they finally settle (compromise) on a number.....which in most cases is far LESS than what it should be..so as an example, in this case, if they are writing off $700 million, the real number should be well in excess of $1 billion..

[demsux]

I canceled my subscription 2 - 3 years ago.

Had been a subscriber for 25+ years.

About a week after canceling, I got a call from their "marketing department".

They asked why I canceled?

I told them that "I am a conservative".

The rep said "Oh", like she had heard it a thousand times and thanked me for my time.

Laughed my butt off.